Q. We are researching how to re-register I Bonds that we purchased many years ago when the way they were registered didn’t seem important. At present, here is how they are registered: 12 out of 34 are registered to me and my wife; 17 out of 34 are registered to my wife, payable-on-death to me; 5 out of 34 are registered to me, payable-on-death to my wife. We need to re-register them all jointly to me and my wife. What is the best procedure to do this?
— Lou

A. We’re curious why you want to re-register them in the first place, especially because the current registration means the proceeds upon death would end up with whichever of you survives the longest,

Both jointly owned and payable on death (POD) pass outside of probate, said Reed Fraasa, a certified financial planner with Highland Financial in Riverdale.

He said of the ones registered to each of you individually, if you change to both of you, make sure that you maintain the primary holder as the first listed in the joint registration.

"It is possible that you may incur a taxable event and trigger a 1099-INT if you change the primary owner’s Social Security number on the bond," Fraasa said.

The IRS states that on redemption of the bond, the tax is owed by the person who put up the money and bought the bond, he said.

"I-Bonds may be redeemed by the co-owner as well and in that case, the tax would be allocated to the co-owner, but that is not an issue between spouses filing a joint return," he said.

The re-registration of the I-Bonds can be done on Treasury Direct website once you have established an account, which is free, at treasurydirect.gov. You’d add the bonds you own to your online account.

"Then you will need to add the additional registrations and finally, you will change the selected bonds to the new registrations you have set up," he said. "I believe this will need to be done separately for you and your wife because the site is based on individual account registration."

One important note: Fraasa said if you receive a message warning that you may be triggering a taxable event during the re-registration process, stop. Unless, of course, you are not concerned about taxes at this time.
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